The Washington-area housing market was less competitive in July than it was in June because of a reduction in sales activity.
I’ll be quick to point out two things, however. First, it was not a slow month by any means. July’s sales were 24 percent higher than those of July 2010.
Second, you might already know that sales fall every summer. You can see in the bottom chart how sales tend to peak in the spring and begin to decline after May or June.
That’s not all that declines in the summer, fortunately. The inventory of homes for sale also dropped from June to July, although it was less of a decline than we saw in sales figures.
Because the inventory of unsold homes fell, July’s buyers faced less competition from other home shoppers while still enjoying a large selection of properties for sale.
Although the market has cooled somewhat since spring, homes are still selling rather quickly. Sales appear particularly brisk when compared to 2008 and 2009, when a huge backlog of unsold properties caused homes to dawdle on the market for months.
If you want the simplest snapshot for July, it is this: Sales chances were 27 percent.
Sales chances are calculated by dividing a month’s sales figures by the inventory on the last day of the month, resulting in a percentage. A figure below 20 percent indicates a buyer’s market. Higher figures mean we’re in a balanced market or a seller’s market.
This year’s most competitive month was March, when chances were at 35 percent. Many sellers in March were delighted to receive multiple offers from eager buyers.
That’s still happening, but it isn’t as common when chances are at 27 percent.
Looking ahead, I suspect sales chances will remain between 22 and 28 percent for the rest of 2011. Sales will continue to cool, as they do every year, but inventory should continue to come down at a similar rate.
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